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11/18/2010

Recent Atlanta Fed polls show home sales remain weak

The Federal Reserve of Atlanta's monthly poll of regional residential real estate brokers saw home sales continue a weak trend in October on a year-over-year basis, unchanged from September. The majority of brokers reported that sales declined from September to October, with more Florida contacts reporting significant declines than in the prior month (see chart 1). Florida brokers continued to report that the moratorium on foreclosures—imposed by several banks concerned with legal problems over foreclosure paperwork—stalled sales. Outside of Florida, little impact appeared elsewhere in the Southeast.

Southeastern homebuilders reported that new home sales continued to soften in October on a year-over-year basis, and close to two-thirds reported year-over-year declines (see chart 2). The majority of builders reported that sales in October were flat to slightly down compared with September sales.

Early reports on October home sales in the Southeast indicate that home sales growth continued to weaken on a year-over-year basis (see chart 3). Comparisons, however, are against strong growth levels last year as buyers rushed to take advantage of the initial federal housing stimulus.

Reports from Southeastern brokers indicated that home inventories were slighty ahead of the year-earlier levels (see chart 4). Fifty percent of brokers reported that inventory in October was up from a year earlier. The Orlando Regional Realtors Association reported that overall home inventories declined 2 percent from a year earlier; however, the single-family home inventory was up 5 percent from a year earlier. Similary, the Greater Nashville Association of Realtors reported that total available inventory was down 2 percent from last year while single-family home inventory was almost 1 percent ahead of the year-earlier level. Reports from Southeastern home builders indicated that new home inventory remained below the year-earlier level.

Southeastern brokers and home builders indicated that home prices were little changed in October although they continued to report downward pressure on home prices from foreclosures across the region.

The outlook among Southeastern contacts remained weak in October (see chart 5), but declines moderated somewhat, which is in contrast to reports of weakening buyer traffic among both builders and brokers. The outlook was largely buoyed by Florida brokers.

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I could swear I'd read a plausible study suggesting that the good of home ownership is mostly explained by long periods of living in one neighborhood, whether owner or renter; can't find it in a cursory search, and it might have been pre-Web.

I know the most understandable way to make people confident that they will be neighbors of long standing is to promote home-ownership, but perhaps there are other ways with fewer - or just different - drawbacks.

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